Ron Paul: The Fed’s Reckless Monetary Policy Caused Bitcoin to Swell

Former Congressman and Republican presidential candidate Ron Paul has now said that the unprecedented rise in the prices of cryptocurrencies such as Bitcoin has been fueled by the faulty monetary policies of the US government.

Paul remarked in a recent interview with CNBC that in his opinion the cryptocurrency phenomenon is a reflection on the disastrous monetary dollar system in the country.

Paul pointed out the massive amount of credit that has been created in the system through the Quantitative Easing (QE) process (Alan Greenspan is infamous for this, among other things). An aggressive credit creation through QE to enable central banks to purchase government debt, as well as other financial assets in a bid to boost lending and strengthen the market is at least partly responsible for the boom in cryptocurrencies, according to Paul.

Paul further asserted his belief that if the government had not recklessly used the QE route, cryptocurrencies would probably still exist. But certainly they would not have turned into the exponential bubble that is currently visible. In Paul’s view, the cryptocurrency craze is an incidental effect of the overly-employed use of quantitative easing by the central banks to cope with the perils of the last financial crisis.

According to Paul, the fundamental economic issues the country faces are enormous. People are desperately looking everywhere for avenues to invest. Otherwise, why would people invest in bonds that are paying negative rates of interest, or purchase stocks in the hope that “this time it’s going to be different?” On the flip-side of that argument, many uneducated investors are also taking heavy losses in the crypto market, due not only to the volatile nature of cryptocurrencies, but because of schemes, scams & flimflams, such as BitConnect.

Paul’s argument is that the gigantic bubble in cryptocurrencies is more dangerous because it is extremely difficult to calculate its true value. The largest of all cryptocurrencies, Bitcoin, has seen its value multiply at an unprecedented rate, and it’s only a matter of time before the Bitcoin bubble bursts.

While Paul has been unable to put his finger on when exactly a plunge in cryptocurrencies or in the stock market could occur, he feels that the danger is very real. Both the bubbles are huge, in the sense that they have arisen due to excessive credit in the market. However, in Paul’s opinion, the price curves indicate that the risk of cryptocurrency plummeting is currently more threatening.